Recent events in Venezuela and Iran have underscored the complex role of stablecoins like Tether’s USDT, which are being utilized both as a lifeline for citizens facing economic hardship and as instruments for sanctioned organizations to bypass financial restrictions.
Economic Turmoil in Iran
Iran has been experiencing significant unrest, with protests erupting due to deteriorating economic conditions and the Iranian rial’s sharp decline against the US dollar. This situation has escalated into widespread demonstrations, resulting in thousands of arrests and numerous fatalities. Amid these challenges, the Iranian government has restricted internet access, further complicating the landscape.
In this context, stablecoins have emerged as crucial tools for citizens. Tether, particularly its Tron-based version, is reportedly the most widely used cryptocurrency in Iran, allowing individuals to hedge against inflation and systemic risks. However, the broader adoption of stablecoins faced setbacks in 2025 due to a major hack affecting the country’s largest exchange and a series of Tether blacklistings. Additionally, the Iranian government imposed annual limits on stablecoin holdings, capping individual purchases at $5,000 and total holdings at $10,000.
Sanctioned Entities and Stablecoins
Stablecoins have also been implicated in the activities of sanctioned entities. A report from TRM Labs revealed that since 2023, Iran’s Islamic Revolutionary Guard Corps (IRGC) has allegedly transferred over $1 billion in stablecoins through two UK-based companies, Zedcex and Zedxion. These firms, while presenting themselves as separate entities, reportedly function as a unified financial infrastructure for the IRGC, facilitating value movement across borders and jurisdictions.
Babak Zanjani, a key figure in this network, has a history of sanctions evasion, having previously been sanctioned for laundering billions in oil revenue for regime entities, including the IRGC.
Venezuelan Adoption of USDT
Similarly, Venezuelans have turned to USDT as a means of protecting themselves against rampant economic instability, with the Venezuelan bolivar losing significant value over the past decade. A lack of trust in traditional banking has led to widespread adoption of USDT, with citizens using it for everyday transactions, from paying for services to settling bills.
USDT’s integration into the Venezuelan economy is so profound that even the state-run oil company, Petroleos de Venezuela, has begun demanding payments in stablecoins to circumvent sanctions imposed since 2020. It is estimated that the company accepts around 80% of its oil revenue in Tether.
Tether’s Compliance Efforts
In response to the challenges posed by sanctioned entities, Tether has been actively cooperating with the US government to blacklist wallets associated with illicit activities. According to a report from AMLBot, Tether blacklisted approximately $3.3 billion in funds from 2023 to late 2025, with $1.75 billion of that amount involving Tron-based USDT. Recently, Tether reportedly froze an additional $182 million in Tron-based USDT across five wallets, although it remains unconfirmed if this action is directly linked to activities in Venezuela or Iran.
This article was produced by NeonPulse.today using human and AI-assisted editorial processes, based on publicly available information. Content may be edited for clarity and style.
